Discussion on the Establishment of Institutions and Mechanisms for International Commercial Dispute Resolution – Extracts of the Presentations Delivered by Experts at the First Seminar of the International Commercial Expert Committee

From: People’s Court Daily Updated: 2018-09-19

ZHANG Yuejiao

Sir William Blair

SHEN Sibao

Rimsky Yuen

LEE Fu-tien

Vladimir I. Kurilov

Susan Finder

Malanczuk Peter

On June 29, 2018, the First and the Second International Commercial Courts of the Supreme People’s Court of China were successively established in Shenzhen and Xi’an. On August 26, the International Commercial Expert Committee of the Supreme People’s Court of China was established and 32 experts were appointed as the first group of committee members. At the first seminar of the International Commercial Expert Committee, ZHOU Qiang, the Chief Justice, issued the appointment letters to the committee members and delivered a speech in the meeting. The first group of experts appointed by the International Commercial Expert Committee come from different legal systems, countries and regions, including heads of important international institutions, such as the World Trade Organization and the Asian International Arbitration Center, as well as domestic and foreign legal experts, eminent scholars, experienced judges and outstanding lawyers. They are well versed in international law and domestic laws in their respective jurisdictions. They have profound knowledge in the fields such as international trade law and investment law, and have rich practical experience, good international reputation and recognized influence.

At the seminar, the committee members expressed their views not only from international perspective but also based on China’s national conditions on the theme of “Construction of Just, Efficient and Convenient International Commercial Dispute Resolution Mechanism” and “Practice and Perfection of International Commercial Dispute Resolution Mechanism”, and actively offer advice and suggestions to the China International Commercial Court regarding its mechanism construction.

ZHANG Yuejiao (Former Chair of the Appellate Body of the World Trade Organization Dispute Settlement Body)

Today, I accepted the appointment letter from the President of the Supreme People’s Court of China. It feels heavy, as it represents trust, responsibility, commission and hope. Therefore, I think that I shall work with the experts here to help the China International Commercial Court to provide fair, objective, transparent, fast and low-cost legal services for parties to resolve disputes.

It is the first time that the China International Commercial Court is established, and it is also one of the few cases in the world. This adapts to the global development and needs. As the Belt and Road Initiative has flourished and more than 80 countries have signed the international agreements, it is necessary to establish a good legal environment. The China International Commercial Court combines arbitration, mediation, and litigation together in one platform to resolve disputes, which is a major judicial reform. For dispute resolution, the China International Commercial Court has invited a number of well-known experts from different legal systems of China and other countries. Experts can work on typical cases together to make better recommendations for international dispute resolution. It is such a wonderful chance to work with diversified, representative, professional and independent international experts to solve problems together. For China, it is also the development need of the current situation. In addition, through a series of typical cases, the China International Commercial Court can create good international experiences for effectively solving the legal issues such as separation of government administration from state-owned enterprise management, the financing difficulties for small and medium-sized enterprises, and other legal problems in emerging fields.

For the experts of the China International Commercial Court, it is necessary to perfect our performance to establish the prestige of the China International Commercial Court and develop these two institutions comprehensively. As the first group of appointed experts, we must obey the code of conduct strictly, work independently and fairly, and avoid any direct or indirect conflicts of interest. We must observe the disclosure system strictly, not only in advance and afterwards, but also the ongoing disclosure after the appointment ends. I suggest that we should: (1) establish an internal platform for experts so that we can exchange ideas more openly and discuss new issues together; (2) strengthen judicial assistance to promote mutual recognition and enforcement of judgments by different national courts; (3) actively participate in the international reform of the World Trade Organization and contribute our forward-looking insights to the formulation and reform of new treaties and conventions on investment disputes; (4) fully respect the international law and implement earnestly the Charter of the United Nations to resolve disputes peacefully, fairly, objectively, neutrally, expeditiously and efficiently.

I would like to work with you to contribute to China’s judicial reform and the worldwide rule of law!

Sir William Blair (Former Judge in Charge of the Commercial Court of High Court in England and Wales)

It is my great honor to be invited to join the International Commercial Expert Committee of the Supreme People’s Court of China - an international professional group composed of experts.

The “Belt and Road” Initiative encourages international cooperation in the field of dispute resolution. The effective system for resolving international commercial disputes is the key to the smooth operation of international trade and commerce, which is even more prominent in the construction of the Belt and Road involving many countries. The establishment of the London Commercial Court is the first one in the world to meet the needs of an international commercial community. Up to these days, it continues to play an important role with other commercial and property courts in England and Wales. Over the past two decades, international commercial courts have been established in various countries and regions around the world, including Singapore, Amsterdam, and Astana at the beginning of this year. In other countries, such as Germany, significant measures have been taken to strengthen their approach to international commercial cases. In any country, courts face international problems and challenges in dealing with international commercial cases. As there is more than one country are involved when courts are ruling this kind of case, purely applying the methods of domestic case hearing would not be so effective in international cases. This is also realized by the Standing International Forum of Commercial Courts which (hereinafter refer to as the Forum) was established in 2017, and I am a member of the Steering Committee of the Standing International Forum of Commercial Courts. Through the Supreme People’s Court of China and the courts of the Hong Kong Special Administrative Region, China has become the founding jurisdiction of the Forum. There will be more countries joining the Forum in the New York meeting in September 2018, including France, which has recently taken significant action in this area, and Japan, which is currently thinking about its position. Therefore, the timing that China established its own international commercial court is appropriate and beneficial, and it will be greatly welcomed in the international commercial community.

The common experience of developing an international commercial court is that it needs to go through a long-term process of development. The international community generally believes that China has fully considered the idea of developing the China International Commercial Court and accepted the best international practice to establish a solid foundation for the future. The commercial community appreciates that the China International Commercial Court respects the principle of party autonomy, as this is one of the bases for the exercise of jurisdiction. The China International Commercial Court recognizes the mutual support between courts, arbitration and mediation. It requires the use of information technology, in which the Supreme People’s Court of China has become a world-class leader; it advocates openness and inclusiveness, and one of the innovative examples is the establishment of the International Commercial Expert Committee; most importantly, the China International Commercial Court has appointed an exceptionally qualified group of outstanding judges.

The international commercial community will have full confidence in the China International Commercial Court. Its establishment is a milestone, and it will successfully and greatly contribute to the current and future development of international commercial dispute resolution.

SHEN Sibao (Chairman of China International Economic and Trade Law Association of China Law Society)

At the macro level, while its credibility is being enhanced, China’s arbitration should not only aim to achieve internationalization and attach higher importance to Chinese elements, but also emphasize more on foreign elements in China’s arbitration and dispute resolution. The establishment of the International Commercial Expert Committee demonstrates this point. From the committee, I saw the first group of Chinese and foreign experts in the field of international commercial resolution. The international arbitration community has made lots of efforts to emphasize on Chinese elements. For example, so far, Chinese arbitrators gradually start to work for many professional organizations and even councils of AGK, CIA, ICC, and ACC, and they actually get appointed in practice. In some cases where foreign laws are applied, it is also possible to add some Chinese elements in the future while appointing foreign arbitrators. In recent years, elements of foreign arbitration or dispute resolution have also received more and more attention in China. An example is the establishment of the International Commercial Expert Committee, and another example is that seven of the thirteen council members of the Shenzhen Court of International Arbitration come from foreign jurisdictions, who are always able to express independent and fair opinions. In order to make China’s dispute resolution mechanism an important part of global dispute resolution mechanism, we need to consider the above two elements comprehensively. The establishment of the China International Commercial Court and the International Commercial Expert Committee by the Supreme People’s Court of China conforms to the development and needs and embodies an international vision, a sense of inclusiveness and the international thinking.

At the micro level, it is our goal to create a dispute resolution mechanism that is more widely accepted by the parties. The best way is to establish a “one-stop” platform that combines mediation, arbitration and litigation. Regarding to international commercial arbitration, there are several suggestions on mechanism innovation: (1) learning from the experience of the London Commercial Court in the arbitration process to allowing parties to choose among one-tiered, two-tiered or three tiered systems; (2) appropriately considering parties’ requests for publication. In addition, it is recommended that the China International Commercial Court give the parties the right of choice in the selection of judges, and explore ideas further to create or discover the most needed and most acceptable way of dispute resolution for most parties.

The combined effects of globalization, regional integration, geopolitics and technological progress have brought significant changes to the world. The Belt and Road Initiative functions as a catalyst and will continue to promote the development of cross-border commercial activities. The establishment of the China International Commercial Court is an important milestone and an innovative breakthrough in the history of China’s judicial development. Not only can it protect the legitimate rights and interests of the international commercial community by ensuring the process of business transactions, so as to promote the development of the global economy, but also can function as an interactive bridge between China and the international judicial community.

First, the China International Commercial Court provides more options for the international commercial community. It offers a one-stop dispute resolution platform where parties can rely on their needs and preferences to choose court judgment, arbitration or mediation. One of the most attractive features of the China International Commercial Court must be the one-stop dispute resolution mechanism established with the support of the China International Commercial Court and the supporting provisions on property preservation and implementation of mediation agreements. Robert Goff, a famous British commercial judge, once pointed out that the role of the commercial court should be to “fuel the wheels of business.” I believe that the one-stop dispute resolution mechanism, which is built on the provisions of the China International Commercial Court, will “fuel the wheels of business” by promoting international trade.

Second, the establishment of the China International Commercial Court also has positive significance to the implementation of the Belt and Road Initiative. One of the cores of the Belt and Road Initiative is “connectivity”. The sustainable economic connection between countries along the Belt and Road is maintained by both physical infrastructure and international legal frameworks. Another core of the Belt and Road Initiative is the rule of law. The Statement of the Co-Chairs of the Forum on the Belt and Road Legal Cooperation on July 3, 2018 emphasized that in order to meet the needs of the Belt and Road projects, efforts should be made to provide a good legal environment and appropriate dispute resolution mechanisms. The establishment of the China International Commercial Court is a major step in the realization of the objective above.

Finally, the establishment of the International Commercial Expert Committee is another unique feature of the China International Commercial Court. In the history of law in China, this is the first time to establish a committee with this nature. The members of the International Commercial Expert Committee not only come from different jurisdictions and backgrounds, but also have different areas of expertise. Such diversity will help the operation of the International Commercial Expert Committee, as we can observe and provide suggestions from different perspectives. As a member of the committee, I am looking forward to working closely with the China International Commercial Court and the Supreme People’s Court of China.

Fuldien Li (Chairman of the Chinese Arbitration Association, Taipei )

There is a very important legal concept in China - determining entitlements and resolving disputes, which includes two different philosophies. If we are conducting ADR, our focus should be on resolving disputes. While, determining entitlements refers to the judgment of what is right and what is wrong and who has the entitlement. More than 2,600 years ago, Guanzi said that it was necessary to determine entitlements first and then resolve disputes. The philosophy of determining entitlements is very essential in the traditional law, but it does not have to be combined with resolving disputes in judicial practice. If disputes can be resolved in other ways before bringing a lawsuit, it is unnecessary to go further to figure out who is right and who is wrong. China started to use a large number of mediation mechanisms in the Ming Dynasty and so was in the Qing Dynasty.

When considering the combination of these two mechanisms, I found it very interesting that the words “coordinated connection” were used in the Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court (hereinafter refer to as the Provisions). Is “coordinated connection” a system or a few procedures? How should limitations and litigation costs be calculated? These questions need to be researched on further. Regarding the methods of the mediation, accurate positioning will be required to determine if mediation is to evaluate or to facilitate. We should also think further about questions like how mediators come into being, how they make suggestions, what the specific procedures of mediation are, and how mediation connects with arbitration and litigation. Regarding arbitration, China’s arbitration is based on legal rules. Can we combine the principle of goodwill and fairness with the arbitration process? Can the arbitral tribunal be a good facilitator and mediator? In addition, in light of the 7-day limitation for mediation prescribed under the Provisions, is there any similar provision applicable to arbitration? These questions should also be studied in depth.

All the members of the International Commercial Expert Committee are very eager to expect and support the establishment of the China International Commercial Court. We also support the establishment of a “one-stop” dispute resolution platform for mediation, arbitration and litigation. However, the these all depend on how friendly the court is to mediation, arbitration and other procedures as well as towards parties. This should be the key to the success of our entire system.

About the current status and experience of Russia in the resolution of international commercial disputes, the heads of China and Russia signed a cooperation agreement on the connection between the Eurasian Economic Union and the Belt and Road on May 8, 2015. I am from the Far Eastern Federal University and our university has established cooperative relationships with many universities in China. Chairman Xi Jinping visited our university in March 2010. For Russia, we are also working hard on learning from the best international practice in legislation. The Russian legislative basis related to the resolution of international commercial disputes includes the 1993 Russian Constitution and the international treaties concluded (multilateral and unilateral). If there is a difference between the international treaties we have concluded and our domestic law, we will give priority to the international law.

In our domestic law, we also have a series of laws and regulations to as guarantee. In Russia, arbitration does not belong to the court system, but there is a system of arbitral tribunal in the court. The arbitral tribunal originated from the former Soviet Union and is subordinated to the court, specializing in foreign-related commercial and economic affairs. However, it is not an arbitration institution but an internal institution within the court, therefore the funding guarantee comes from the state. In Russia, we are also committed to promoting diversified dispute resolution mechanisms, including negotiation, mediation, arbitration and litigation. According to the general provisions, parties who are involved in international economic activities have the right to obtain judicial protection in Russia. This is recognized by the Russian Constitution and stipulated by the generally recognized rules of the international laws and treaties. The arbitral tribunal may hear foreign-related cases involving economic activities. For example, it includes the situation when one party or both parties are foreigners, or the subject of the disputes between two parties is in another country. For the foreign economic cases mentioned above, the arbitral tribunal has exclusive jurisdiction. The foreign-related factors include: (1) the property in question is owned by the Russian Federation, or involves the privatization of state-owned assets; (2) the subject involved in the case is real estate in Russia; (3) intellectual property rights, such as patents, trademarks, utility models and industrial designs, are registered in Russia; (4) cases for declaration that there is no dispute in relation to matters that require issuance of registration by Russian authorities If liquidation or incorporation of relevant entities or enterprises are within Russia, these special cases can only be heard by the arbitral tribunal.

Susan Finder (Distinguished Scholar in residence of the School of Transnational Law of Peking University)

It is my great honor to be a member of the International Commercial Expert Committee of the Supreme People’s Court of China. The China International Commercial Court is undoubtedly a very important step in the internationalization of Chinese courts! The establishment of the International Commercial Expert Committee can be said to be the first international, foreign-related and diversified expert committee of the Supreme People’s Court of China. The development of such a platform enables foreign experts to provide their suggestions to the Supreme Court, and the Supreme Court can also get a greater number of better suggestions from the outside world. The China International Commercial Court can accept foreign evidence without notarization, which is a very practical solution and saves a lot of trouble for many foreign parties.

The Supreme People’s Court plays a very vital role in advancing the rule of law in the world. However, there are still some inconsistencies between Chinese laws and international practices or conventions on some issues. For example, more than 100 countries have already signed the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents, while only the Hong Kong Special Administrative Region of China has signed it. If China can sign it, it is definitely a very important step. Meanwhile, Chinese laws need to be properly amended, including the Civil Procedure Law, the Judges Law and the Arbitration Law. For example, the amendment of the Civil Procedure Law may allow choosing courts or arbitration, using foreign languages in trials, or even enabling interim judges from Hong Kong, Macao or foreign countries to participate in the trial. The China International Commercial Court also has a website in both Chinese and English, which is very good for overseas online visitors to know China’s international commercial court. Therefore, I hope that the relevant provisions of the China International Commercial Court can widely solicit public opinion before its official introduction. The China International Commercial Court will also be an excellent platform for mutual education, which allows law school students to visit the China International Commercial Court more easily. I teach in China, and there are many professors or deans of law school that share similarities with me, and we have very good students. In the future, the China International Commercial Court can be a remarkable training base for developing a new generation of judicial practitioners with an international vision and international legal talents of China!

Peter Malanczuk (Professor of Law of the Peking University School of Transnational Law)

For the China International Commercial Court, there is still a long way for the mutual recognition and enforcement of international awards. As it is a new thing, we should learn from the useful experience of other international commercial courts and combine with China’s national conditions to coordinate with Chinese domestic law. As it requires long-term development, there should be some corresponding changes in Chinese laws in the future so that the China International Commercial Court can develop faster and further.

With regard to the one-stop and diversified dispute resolution mechanism, according to Article 11 of the Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court (hereinafter refer to as the Provisions), the China International Commercial Court can cooperate with both Chinese and international arbitration institutions. Some institutional and procedural improvements are needed for mediation and its relationship with arbitration. In addition, we can learn from the current experience and analyze the Hong Kong Mediation Center and the Shenzhen Court of International Arbitration. They have two different procedures for appointing mediators and arbitrators, and ultimately they can jointly form an arbitration award that can be enforced in accordance with the New York Convention. The China International Commercial Court may learn from relevant experience to promote the operation of the court and the enforcement of judgments.

Regarding to the enforcement of arbitration and court judgments, as there are currently more than 70 countries along the Belt and Road and the number is still growing, it is important to make sure the enforcement of judgments made by the China International Commercial Court at least. We can see that the New York Convention is for arbitration, which enables international arbitration to be enforced globally and timely, and 159 countries and regions have signed it so far. However, there is no such a system for judicial judgments, and it lacks a global network system. In terms of international cases, there are also many controversies about the definition of “international”, but the main problem is that only 29 countries have sign the Hague Convention which is about exclusive choice of court, and the number is even less than 20% of that in the New York Convention. If the court judgments from many countries along the Belt and Road cannot be enforced between nations, the judiciary will be greatly circumscribed. Hence, we need to adopt the reciprocity principle and give it a broader definition, so that judgments made by the China International Commercial Court can be widely recognized. In addition, mutual enforcement of court judgments can be achieved through the signing of reciprocal or bilateral agreements by Chinese and foreign commercial courts.

*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.